10 Jul 2015
Providing care is all of our business
The business of care is everybody's business.
But are we asking the right questions about care?
We Are All Invested In Care… So Be Inquisitive
On the first of January this year, my 89 year old gran had a life changing moment with her health. The net result was that my family suddenly had to become experts in care and nursing homes. We're not unusual. A quick chat with John Galvin, CEO at our charity partner Elderly Accommodation Counsel (EAC, see photo below), suggested that what we had suddenly become immersed in is no different to the experience that many families face a number of times in their lifetime.
Ironically, a week before, I was sitting with our management team here at Legal & General, in a meeting with a major care provider, asking them questions about how they operate, how they go beyond the minimum required by the regulations and how they balance the financial demands of running a business with creating a culture of care within their organisation.
Now things have calmed down on all fronts, I have time for reflection on whether that personal crisis in care had anything in common with the questions we were asking the management team as an investor.
I concluded that the business of care is everybody's business.
The Realities Of Later Life Housing
Our work with the Elderly Accommodation Counsel (EAC) over the past five years has taught us a lot about what we now call later life housing. That is, housing suitable for all your needs even if your health and mobility decline later in life. By supporting the EAC, we've been helping over 15,000 residents in later life housing to remain independent and we've learned several home truths about older people and care:
- Most people want to live in their own home for as long as possible in later life
- A health crisis is often the trigger for many things often including a (re)assessment of care and practical support for a person or couple to remain in their own home.
- Families (either at the health crisis stage or before that point) embark upon a very steep learning curve about the mix of public and private services available in their particular locality (including gaps/patchiness of provision) and the funding complexities involved.
- It's often the family of the relative involved who have to find out what options are available and make difficult decisions for their loved ones.
There is also one fundamental fact about how people in the UK deal with care that is often missed. Culturally, unlike many other parts of the world, the UK has an intrinsic belief that later life care is something you can ask others to do on your behalf rather than bringing elderly relatives into your own houses. This is very different to cultures such as Japan and Indiawhere the complete opposite happens.
Funding Later Life Housing
The reality is that care for people in later life needs funding. Whether it's private, individual or state funding, we need to keep providing front line services and somewhere safe and comfortable for older people in a vulnerable position to live. If you can't support a loved one in your family home, then it needs to be paid for elsewhere.
Here at Legal & General, we have invested over £252 million into long term finance for Care and Extra Care housing providers such as MHA, Ideal CareHomes, Care UK and recently Sanctuary. We've had some interesting debates over how we can support the continuous improvement and evolution of care, which is a clear commitment from these organisations, whilst they are in the Legal & General stable.
Are We Asking The Right Questions About Care?
So are the questions that investors ask management teams, when investing institutionally in care, any different from the questions a family asks when they are worrying about where their relative is to live?
- The financial questions often come first, revolving around occupancy rates, future demand for services and the funding mix between private and state-funded residents.
- Then we must consider the non-financial aspects, such as what the regulator thinks of the accommodation, as measured by employee training, spend per head and customer satisfaction scores.
The Missing Questions In The Culture Of Care
My personal crisis of care situation and that of supporting an investment team has led me to a clear conclusion: the questions families and investors must be asking comes down to the simple gap analysis between three key groups of people:
- What does your loved one think about living there? – Independent resident consultation is key.
- How does the family of the loved one feel about the home? This perception covers many things including what it's like to live there for their relative but also what they themselves make of the place, the staff, the quality of care and so on.
- What do the staff who work there think of the place / home? Things like what's it's like to work there and do they get listened to when making suggestions for improvements.
These three questions very rarely appear in the conversation with a family or indeed the conversation in the boardroom with a management team. But why are these questions so important? They're important because they highlight two important gaps in expectations:
- If a vulnerable relative doesn't like living there but the family thinks they do, then that creates a problem.
- If an employee doesn't like working there and the relatives feel the same way, then we also have a problem.
Resident Happy, Family Happy, Employee Happy!
On the positive side, imagine finding a relative of yours somewhere that they enjoy living, the staff like working there and the families think it's good too.
It's got to mean that the quality of care is great and your family member will have the best opportunity to thrive. Imagine putting your capital into a place that does business this way too.
To move this debate forward we have hatched a cunning plan with our friends at the Elderly Accommodation Counsel. As part of the 2015 ‘Housing for Older People Awards', we will be jointly introducing a new category of awards. It will be an award for those providers brave enough to understand independently how the views of residents, employees and families views compare.
I'm interested in your thoughts of whether your own experience of care as a family or as an investor is similar or different to what we have concluded here… Why don't you tell us on Facebook or Tweet us? Also, please read all about our 'Income in retirement' campaign in our latest CSR report.